A case for elimination of pallet skirts
In a 2019 study (see below) by First Insight, Inc, in-store spending was significantly higher in retail vs online on products $50 and above. In addition impulse purchases are much more common when shopping in-store. This is very positive news as it relates to your products in a Costco Warehouse.
In-store spending on products $50 and above, as well as impulse buying, are significantly higher in retail vs online.
As customers walk though the doors of a Costco Warehouse, you are presented with a unique opportunity to have those customer connect with your brand which can't take place online. This opportunity is TOUCH. You may have already heard from Costco buyers: What customers look at they touch, and what they touch, they buy.
The sensory experience of physically holding a product in its packaging creates a sense of ownership. Ownership is more likely to be completed when the quality of the packaging has a strong reflection of the quality of the product and brand.
Packaging produced with sustainable materials which is solid, strong and presented without damage will be far more likely to be purchased than a product packaged in a package such as a flimsy plastic clamshell.
If the goal is to influence customer decisions by physical connections with the product and packaging, what options do we have to improve the rate which connections occur since packaging costs are always stressed. Is there a way to free up more packaging budget?
Pallet skirts have been used almost since Costco's inception. Pallet skirts are commonly used on higher priced products which have limited amount of products on the pallet.
Let's explore some of the pros and cons of pallet skirts:
PROS:
Billboard sized advertisement for your brand and products.
CONS:
High material cost.
High labor cost at warehouses (setup, repair, recycling)
Commonly damaged by carts
Customers may decide from a distance if your product is right for them before any engagement occurs.
As you make choices on where to invest your packaging budget, consider to divert the cost of the skirt and put it into the packaging. The more attractive the package, the more likely it is to be touched and once touched, the more likely it is to be purchased.
Until next week,
R/
TCPG